When a dividend is paid, the NAV of the units ____ to that extent.
A
Rises
B
Falls
C
There is no change
D
NAV does not depend on the dividend
Correct Option:
B
Explanation
When a mutual fund distributes an IDCW (formerly called a dividend), the amount distributed is deducted from the scheme's assets. As a result, the NAV falls by approximately the amount of the distribution, subject to applicable adjustments.
